Sprint Starting LTE in July as It Chases Verizon, AT&T

June 27 (Bloomberg) -- Sprint Nextel Corp., the third-largest U.S. wireless carrier, will introduce faster service
based on the LTE standard in five cities on July 15, in a bid to
catch larger peers Verizon Wireless and AT&T Inc.

Networks supporting LTE -- short for long-term evolution --
will open in Atlanta, Dallas, Houston, San Antonio and Kansas
City, with Baltimore soon to follow. The company is seeking to
make good on a promise to have six cities with LTE by mid-year.
Sprint already sells phones that work with the technology,
though users won’t be able to take advantage of the faster
speeds until the networks come online.

Even after the move, Sprint remains well behind Verizon,
which has LTE in 304 cities, and AT&T, which offers the
technology in 41 cities. To compete, Sprint is spending $10
billion on network expansion and it’s aiming to tempt users with
an LTE version of Apple Inc.’s iPhone, expected later this year.

“Verizon and AT&T have a head start in LTE, but hopefully
we will close the gap pretty soon,” Sprint Chief Executive
Officer Dan Hesse said in an interview. “We will be pushing
hard to get more markets launched as soon as we possibly can.”

Sprint shares were unchanged in today’s trading, closing at
$3.13 in New York. The stock has risen 34 percent this year.

Network Vision

Sprint’s two-year network expansion, known as Network
Vision, is increase expenses at a company that has already
posted five consecutive years of losses. Adding to the financial
pressure is Sprint’s four-year contract with Apple to sell $15.5
billion worth of iPhones. Sprint was the last of the three big
U.S. carriers to get the device.

The burden of LTE upgrades and the cost of selling the
iPhone highlight the challenges Sprint faces in a market where
it competes with rivals nearly twice its size. AT&T has 103.9
million users and Verizon has 93 million, while Sprint has 56.1
million.

Sprint has explored deals to add scale. In February it
broke off talks to acquire regional pay-as-you-go carrier
MetroPCS Communications Inc. Hesse said the industry was tilted
heavily toward two players and that a stronger third player
would have benefits.

“There is such a huge gap in size between No.2 and No.3
being Sprint,” said Hesse. “Consumers and the market would be
served better by seeing more consolidation among the smaller
players so they can have size and scale to compete more
effectively with the emerging duopoly,” he said.

Hesse says his top focus is on the two years of network
upgrades and not on acquisitions.

“For us to undertake a merger it would have to be
compelling if we were to do it in 2012 or 2013,” said Hesse.
“The hurdle is higher right now because of the importance of
doing this project well,” he said.